As markets navigate a landscape shaped by diverging global growth trends and ongoing trade tensions, attention this week turns to a series of key economic releases. US inflation data, producer prices, and jobless claims will be closely monitored for clues on the Federal Reserve's policy path, while the UK's monthly GDP report could offer fresh insight into the health of the British economy. Against this backdrop, EURJPY continues its upward momentum, supported by bullish technical signals and a stronger-than-expected eurozone growth revision, even as Japan's confirmed contraction adds to broader market caution.
Overview
As markets navigate a landscape shaped by diverging global growth trends and ongoing trade tensions, attention this week turns to a series of key economic releases. US inflation data, producer prices, and jobless claims will be closely monitored for clues on the Federal Reserve's policy path, while the UK's monthly GDP report could offer fresh insight into the health of the British economy. Against this backdrop, EUR/JPY continues its upward momentum, supported by bullish technical signals and a stronger-than-expected eurozone growth revision, even as Japan's confirmed contraction adds to broader market caution.
Key Economic Events
Wednesday 15:30 (GMT+3) - USA: CPI m/m (USD)
Thursday 09:00 am (GMT+3) - UK: GDP m/m (GBP)
Thursday 15:30 (GMT+3) - USA: PPI m/m (USD)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Friday 17:00 (GMT+3) - USA: Prelim UoM Consumer Sentiment (USD)
Friday 17:00 (GMT+3) - USA: Prelim UoM Inflation Expectations (USD)
Technical Analysis
Since establishing a low at 161.069 on May 23, EURJPY has embarked on a sustained upward trajectory, driven initially by the emergence of a Bullish Engulfing candlestick pattern — a classic reversal signal that reflected fading bearish momentum. This bullish shift propelled the pair above both the 20- and 50-period Exponential Moving Averages (EMAs), breaking through the prior swing high of 165.201 and setting a new all-time high at 165.802.
Technical indicators continue to support the bullish case. The Momentum Oscillator remains firmly above the 100 threshold, suggesting continued upward pressure, while the Relative Strength Index (RSI) is approaching the overbought zone, reinforcing the presence of strong buying interest. Together, these signals confirm that bullish sentiment remains intact, with price action showing no immediate signs of reversal.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
166.847: The initial resistance is 166.847, which represents the weekly resistance, R2, calculated using the standard Pivot Points methodology.
167.755: The second price target is identified at 167.755, corresponding to the 161.8% Fibonacci Extension drawn from 165.201 to 161.069.
168.423: The third target is set at 168.423, reflecting the weekly resistance, R3, estimated using the standard Pivot Points methodology.
171.887: An additional price target is estimated at 171.887, which corresponds to the 423.6% Fibonacci Extension drawn from 165.201 to 161.069.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
165.201: The first level of support is set at 165.201, which aligns with the daily high from May 13.
164.360: The second support level is identified at 164.360, reflecting the weekly Pivot Point, PP, calculated using the standard methodology.
163.449: The third support level is seen at 163.449, corresponding to the weekly support, S1, estimated using the standard Pivot Points methodology.
161.069: An additional downward target is observed at 161.069, corresponding to the swing low from May 23.
Fundamentals
The eurozone economy expanded more than expected in the first quarter of 2025, with growth revised up to 0.6% from the previously estimated 0.3%. The upward revision was largely driven by stronger performances in Germany, which grew by 0.4%, and Ireland, where growth was sharply revised to 9.7%. While the data points to a return to expansion, analysts caution that the surge may not reflect underlying strength, as some of the growth was fueled by frontloading of exports ahead of impending US tariffs.
On the other hand, Japan's economy contracted at an annualized rate of 0.2% in Q1 2025, a smaller decline than initially estimated but still reinforcing the Bank of Japan's cautious policy stance. The downward revision in exports, coupled with weak domestic demand and growing tariff pressure from the US, has heightened uncertainty. With inflation elevated and external headwinds intensifying, the BOJ is widely expected to hold rates steady at its upcoming June 17 meeting.
Conclusion
EURJPY remains supported by a strong technical setup and improved eurozone data, even as broader market sentiment is tempered by global trade tensions and uneven growth trends. With key economic indicators due from the US and UK this week, traders should remain attentive to potential volatility. While the pair's bullish structure remains intact, external risks — including Japan's economic fragility and tariff uncertainty — warrant a cautious, data-driven approach in the days ahead.